Think Adds $40M for Electric Cars, Ener1 Ups Investment

Norway-based electric car maker Think has just brought on $40 million in new equity investment — enough, the automaker says, to become cash flow positive in 2011. Think says it’s now “fully funded,” but a key step en route to the North American expansion that the company envisions remains incomplete: securing government funds.

Ener1 and RockPort Capital Partners — already hefty backers for Think — co-led this round with investments of $12.5 million apiece. All of Think’s other existing shareholders also joined, making up the remaining $15 million investment in a round that was oversubscribed and “significantly” larger than Think set out to raise, according to Think CEO Richard Canny.

Think, which formed a U.S. joint venture two years ago with Kleiner Perkins and RockPort, has requested low-interest loans under the Department of Energy’s Advanced Technology Vehicles Manufacturing Program. Canny said in an interview today that while he didn’t want to speculate on a timeline for when DOE funds might come through, Think is “very happy with the level of engagement” it’s seeing at the agency. According to a release from the company this afternoon, Think has “recently completed the initial phase of due diligence” in the loan application process.

That timeline assumes production will begin at the Elkhart plant in the first quarter of 2011, supported by Uncle Sam. Regardless of whether the DOE loan request wins approval, Canny said Think plans to ship 500 units of its Think City model — assembled by Finland’s Valmet Automotive — to lead markets in North America. Depending on how the market shapes up and the loan shakes out, Canny said Think may opt to import more vehicles from Finland at some point.

Similarly, the company is holding off on setting a firm price for the City model, although Canny said it will likely be in the range of $20,000 after federal and state incentives. Citing the upcoming Nissan LEAF (set to sell for approximately $33,000 before incentives when it launches later this year), Canny said, “We want to wait and see where we need to be,” in terms of price points to be competitive.

According to Canny, the new funds announced today will support two main initiatives, including product development and expansion in North America and Europe. In addition to “accelerating” work on its right-hand drive model, Think aims to cultivate develop a business supplying drivetrain systems.

Canny said the company is now pursuing 3-4 new business opportunities related to its drivetrain tech that could lead to pilot-stage deployments, with potential to expand to low to medium-volume projects in partnership with OEMs. These would be in addition to existing projects with Mazda, Japan Post and Itochu Corp.

Think is also in talks with distribution partners, including car sharing providers and companies that would offer battery leasing, and it’s looking ahead to future vehicle models, although Canny declined to discuss those plans in detail.

Canny said Ener1 has maintained its approximately 32 percent stake in Think, while RockPort Capital has stepped it up a notch to become the second-largest shareholder. However, Ener1 CEO and Chairman Charles Gassenheimer has just replaced Reidar Langmo as chairman of Think’s board of directors (Langmo is taking the role of vice chairman). According to a statement from Gassenheimer today, “Ener1 fully intends to invest further resources in Think.” (Gassenheimer touched on Ener1’s hopes for Think in this video interview in late March.)

As of March 31, 2010, Ener1 says it had invested a total of $18.8 million in 10.8 million shares of Series B stock from Think. So this latest investment, which Ener1 expects to close by the end of June, will bring the total to some $31 million.

Images courtesy of Think and Ener1

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